GHALEB CACHALIA: Cheap shot

I like Peter Hain.  He fought valiantly against apartheid and was a dutiful and responsible member of the British political establishment, serving in the governments of Tony Blair and Gordon Brown, as leader of the House of Commons for two years, and now as a peer of the realm.

But like many politicians he is not without some controversy, having failed in January 2008 to declare some 20 donations worth more than £100,000 during his deputy leadership campaign. Hain admitted “deeply regrettable administrative failings”, but still faced questioning on whether the oversight was due to changes in campaign management causing “chaos” during the campaign or to the desire of some donors to remain private.

The above notwithstanding, in Business Day’s Big Read on August 31 Hain sets his eyes on a cause and country that is dear to him and focuses on a case for change to avoid bankruptcy in SA — bankruptcy, it must be said, that was brought on by failed policies, malfeasance and corruption instituted by successive ANC governments over a period of some 27 years.

His starting point is a call on the private sector — not the state — to “join the struggle against corruption [and] encourage fundamental economic transformation”. He argues for an emulation of the German model of industrial democracy or co-determination that has worked in Germany, providing, as he says, “higher living standards, greater export success, stronger manufacturing, world-class training skills, better social cohesion and stronger trade union skills”.

Hain also calls for a wider spread of wealth and ownership, the rewarding of risk takers and entrepreneurs and the transformation of the state — particularly where many of the 900-odd state-owned enterprises are bankrupt and “leech on taxpayers, who should be funding other things such as better education, health and housing”.

He goes on to say the neoliberal state is not the answer, suggesting instead “a smarter interventionist, risk-taking state”, while calling on the Left to redefine its stance as a credible alternative to the small-state solution. At the same time, Hain calls for trade unions to jettison “an outdated adversarial industrial relations system characterised by conflict and mutual suspicion”

The official opposition DA is written off — unless it changes, among other things, its leadership, and addresses the “lack of clarity about what it really stands for”. But all is not lost, and “there is fertile soil for the emergence of a capable opposition if it rejects the DA’s neoliberal economics and the EFF’s populist opportunism”. At the same time Hain calls for the ANC to reinvent itself and genuinely renew, failing which “the party is on borrowed time”.

In short, Hain is arguing for the reinvention of the mittelstand along the lines of the German model with a hefty dose of a new statism, predicated on a cleansed and reinvigorated ANC or an opposition that embraces the tenets of his proposed reinvention — a New Left, clean and free of corruption, able to bridge the policy gaps between enterprise, social democracy, socialism and German corporatism.

I use the term mittelstand in the sense Ludwig Erhard, the economics minister who crafted postwar West Germany’s economic miracle, understood it; warning against reducing mittelstand to a mere quantitative definition and instead emphasising more qualitative characteristics that embody the German mittelstand, as it is “much more of an ethos and a fundamental disposition of how one acts and behaves in society”.

What Hain appears unable to grasp is that in the SA context it is precisely the ANC policies of the past — with which Hain has historically had no issue — that have given rise to the very failure he seeks to remedy. There is, furthermore, scant recognition of the ideological underpinnings and spectre of the ANC’s stated agenda — the national democratic revolution, which Joe Slovo described as “the strategic goal of establishing a socialist republic and the more immediate aim of winning the objectives of the national democratic revolution, which is inseparably linked to it”. The new and invigorated statism Hain punts fits neatly into this, his championing of the German example aside.

While Hain seeks, despite the patent failure of BEE, to augment the offering so as to broaden its reach and alter the “concentration of ownership in a few hands”, there is little credence given to the pernicious role of cadre deployment and the structural facilitation of corruption and mismanagement embedded in statist-driven solutions. And while he acknowledges the market failure of many of the 900 state-owned enterprises, his solution is “to transform the state” — whatever that entails — and not allow the private sector to address the state’s failure except by way of co-operation and possible partnerships.

He also appears not to grasp more than a quarter of a century of embedded corruption predicated on a model that facilitates theft as long as a portion is given unto Caesar — a modus operandi that has rendered the ANC incapable of moral renewal. Any observation of the factional fights in the ANC, which play out at every level — not least in the recent spree of looting and attempts at insurrection — would inform and remind the viewer of the fighting over the spoils that characterises the party’s politics. In view of this, Hain’s “gentle correction” is that “there are good politicians despite the bad ones, the gangsters and the chancers”. The problem is that within the ANC they are as scarce as hen’s teeth, and wield no real heft as they are bound to support Cyril Ramaphosa — a silent fellow traveller in the dark days of Jacob Zuma and a recipient of an embarrassment of riches in return for being pipped to the presidency by Thabo Mbeki in the successorship to Mandela.

So much for the ANC. What about the DA, which Hain dismisses with a broadside brush as being neoliberal adherents? Let’s examine for a minute the economic policy of the DA as enunciated by “its flawed and confused leadership”.

While the ANC’s BEE policy is a system of trickle-down redress that is the embodiment of the idea that if you transfer assets or contracts from one elite to another it will lead to broad-based prosperity, the DA’s is qualitatively different. The ANC model has clearly not worked — and while Hain acknowledges this, he would do well to focus on the actual drivers of inequality of opportunity instead of the social and economic equalisation of outcomes. These are the very material things that keep the average South African excluded from the economy, and keeps them poor and without opportunity. To quote Helen Zille: “We can choose to become an open, opportunity society for all, or we can choose to become a closed, crony society for some”.

The DA’s Economic Justice Policy, based on an avowedly social market economy, can be summarised as one that would address the legacy of economic exclusion while simultaneously freeing South Africans from apartheid race classification. This encompasses the inclusion of the UN sustainable development goals (SDGs) as a model to address inequality and includes building a lean democratic state, increasing employment, pursuing world-class economic outcomes, reducing wealth inequality, addressing the breakdown of families, ensuring access to quality healthcare for all, eradicating stunted growth in children, minimising spatial inequality, pushing land reparations and providing a zero-tolerance approach to discrimination. It further envisions close engagement between government and the private sector and will encourage and incentivise corporates to make a positive socio-economic impact based on the SDGs.

On what basis does Hain categorise this as neoliberal? On what basis is this deemed to evince a “lack of clarity about what it (the DA) really stands for”? On what basis would Hain disagree?

I think it would be useful for him to engage the opposition, to free himself from the ideological confines of the Left, from a hankering after the elusive “good” in the ANC, to do what is empirically right and to pursue what Erhard described as an “ethos and a fundamental disposition of how one acts and behaves in society” — as summarised in the DA’s Social Justice Policy — in the hope that we can all contribute to a vibrant economy and society that builds on the legacy on Mandela — who Hain, along with me, clearly admires. It’s an open invitation and I stand at the ready to facilitate it.

• Cachalia, a DA MP, is shadow public enterprises minister.